-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D5/7WZTTTL1P4jsswunvrDVUz0/RLY2wpNa1t2uT4wHmWa8Doz1rZdhPMDEpW/KW 53FXQ3H1wq5nMat41PohVQ== 0001157523-05-007948.txt : 20050907 0001157523-05-007948.hdr.sgml : 20050907 20050907093015 ACCESSION NUMBER: 0001157523-05-007948 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050907 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050907 DATE AS OF CHANGE: 20050907 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOLT INFORMATION SCIENCES, INC. CENTRAL INDEX KEY: 0000103872 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 135658129 STATE OF INCORPORATION: NY FISCAL YEAR END: 1028 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09232 FILM NUMBER: 051071776 BUSINESS ADDRESS: STREET 1: 560 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-2928 BUSINESS PHONE: 2127042400 MAIL ADDRESS: STREET 1: 560 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-2928 FORMER COMPANY: FORMER CONFORMED NAME: VOLT INFORMATION SCIENCES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VOLT TECHNICAL CORP DATE OF NAME CHANGE: 19680913 8-K 1 a4966398.txt VOLT INFORMATION SCIENCES, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): September 7, 2005 VOLT INFORMATION SCIENCES, INC. (Exact Name of Registrant as Specified in Its Charter) New York 1-9232 13-5658129 - --------------------------------- ------------- ----------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 560 Lexington Avenue, New York, New York 10022 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (212) 704-2400 (Registrant's Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(C) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. The information in this Form 8-K, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as expressly set forth by specific reference in such filing. On September 7, 2005, the Company issued a press release announcing its results of operations for the third quarter and nine months ended July 31, 2005. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (a) Financial statements of businesses acquired: Not applicable. (b) Pro forma financial information: Not applicable. (c) Exhibits: 99.1 Volt Information Sciences, Inc. Press Release dated September 7, 2005. S I G N A T U R E Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. VOLT INFORMATION SCIENCES, INC. Date September 7, 2005 By: /s/ James J. Groberg --------------------------------- James J. Groberg, Senior Vice President -2- EXHIBIT INDEX Exhibit Number Description 99.1 Volt Information Sciences, Inc. Press Release dated September 7, 2005 -3- EX-99.1 2 a4966398ex991.txt EXHIBIT 99.1 Exhibit 99.1 Volt Information Sciences Announces Third Quarter Results NEW YORK--(BUSINESS WIRE)--Sept. 7, 2005--Volt Information Sciences, Inc. (NYSE: VOL) today reported financial results for the Company's third quarter and nine months ended July 31, 2005. Volt will conduct a conference call webcast at 11:00 A.M. (EDT) today to discuss third quarter results. The conference call dial-in number is 1-888-469-0571 (domestic) or 1-517-623-4001 (international), passcode: Third Quarter. The conference call will be broadcast live over the Internet and can be accessed for the next 30 days at http://www.volt.com/investor/press_release.cfm. Attached is a summary of the Company's results of operations and the notes thereto. The notes are an integral part of the summary. THIRD QUARTER - FISCAL 2005 RESULTS For the third quarter of fiscal 2005 ended July 31, 2005, the Company reported net income of $5.0 million, or $0.32 per share, compared to $9.2 million, or $0.60 per share, in the fiscal 2004 third quarter. Net sales for the 2005 quarter increased by 9% to $543.5 million, compared to $500.7 million in last year's comparable quarter. NINE MONTHS - FISCAL 2005 RESULTS For the first nine months of fiscal 2005, the Company reported net income of $8.7 million, or $0.56 per share, on net sales of $1.6 billion, compared to net income of $22.2 million, or $1.45 per share, on net sales of $1.4 billion last year. The 2004 results included net income of $9.5 million, or $0.62 per share related to discontinued operations resulting from the sale of a building used by a subsidiary previously sold. REORGANIZATION OF TELECOMMUNICATIONS SERVICE The Company also announced a restructuring and reorganization of the Telecommunications Services segment which it commenced implementing in August. As part of that reorganization, R. J. Anderson has been appointed President of the segment. Mr. Anderson joined Volt in 2001 and prior to his promotion held the position of Senior Vice President of the Construction and Engineering division of the segment. Prior to coming to Volt, Mr. Anderson had been associated with General Dynamics for twenty years. His final position in that company was as President of the Network Infrastructure and Commercial divisions. Mr. William Shaw, Chairman and President of Volt, in commenting on the action taken, stated "For several years the depressed economic conditions in the telecommunications industry has made it extremely difficult to achieve acceptable profitability using the structure that had been so profitable in prior years. A detailed and comprehensive study by Volt has resulted in a decision to adopt a more productive structure, which we believe should improve results. The reorganization, when completed", stated Mr. Shaw, "will result in an annual reduction of approximately $4.2 million in overhead and a more focused and efficient operating structure." STAFFING SERVICES The 8% increase in sales in the fiscal 2005 third quarter from the comparable fiscal 2004 quarter was due to increased staffing business in both the Technical Placement and the Administrative and Industrial divisions offset, by a decrease in the VMC Consulting business of the Technical Placement division. Gross Profit for the segment increased 2.6% while gross margin as a percentage of sales for the quarter declined to 15% from 16% in the fiscal 2004 comparable quarter, primarily due to higher payroll taxes throughout the segment and reduced markups within VMC Consulting. Overhead increased $6.4 million, primarily the result of an increase in indirect labor and related payroll costs incurred to sustain the forecasted growth of the segment, including a material increase in the VMC Consulting business, resulting in a decrease in overall segment profitability. COMPUTER SYSTEMS The Computer Systems segment's sales increase in the third quarter of fiscal 2005 over the comparable 2004 quarter was primarily due to improvements in the segment's operator services business, including ASP directory assistance. The sales increase included $6.2 million of DOS business acquired from Nortel Networks, which represented 14% of the segment's sales for the 2005 quarter. A lower gross margin percentage in the current quarter, as compared to the 2004 third quarter, was partially due to the favorable settlement of vendor disputes and refunds in the 2004 quarter approximating $1.5 million, lower margins recognized in the current quarter related to product revenue and the absence of Nortel business in the 2004 quarter (acquired in the fourth quarter of 2004), the margins of which are lower than other business units of the segment. TELEPHONE DIRECTORY The Telephone Directory segment's 23% increase in sales for the third quarter of fiscal 2005 from the comparable 2004 quarter were the result of increases in the community telephone directory operation of DataNational, sales of the telephone directory systems operation and sales in the printing operation in Uruguay. DataNational's increased revenue and gross profit was due to an increase in the number of directories printed and delivered during the quarter. The segment's $3.0 million increase in operating profit was the result of the sales increase, partially offset by a decrease in gross margin percentage, which was primarily due to the product mix within the segment. TELECOMMUNICATIONS SERVICES The Telecommunications Services segment's sales decrease of 17% in the third quarter of fiscal 2005 from the comparable 2004 quarter was due to declines in the Business Systems and Construction and Engineering divisions, partially offset by an increase in the smaller Central Office division. The segment's operating loss for the quarter was due to the sales decrease and the reduction in gross margin percentage, partially offset by the decreased overhead. Actions by certain major long-distance telephone companies to reduce marketing of local residential service have negatively impacted sales and continue to impact margins of the segment as increased competition for less available work continues to pressure pricing and gross margins throughout most of the segment. Despite an emphasis on cost controls, which reduced quarterly overhead by 23% compared to the previous year, the results of the segment continue to be affected by the decline in capital spending by telephone companies caused by the depressed conditions within the segment's telecommunications industry customer base. GENERAL CORPORATE EXPENSES The increase in General Corporate expenses compared to the 2004 quarter was related to expenses necessary to meet the disaster recovery redundancy requirements for business continuity and communications, increases in compensation and higher professional fees and costs related to compliance with the Sarbanes-Oxley Act. Cash and cash equivalents, excluding restricted cash, was $64.9 million at the end of the quarter. At July 31, 2005, the Company had sold a participating interest in accounts receivable of $95.0 million under its securitization program and had the ability to finance an additional $55.0 million under the facility. In addition, the Company may borrow under a $40.0 million revolving secured credit facility. The facility requires the maintenance of certain accounts receivable balances in excess of borrowings and terminates in April 2008 unless extended. At July 31, 2005, the Company had borrowed $4.2 million (two million Euros and one million British pounds) under the facility. Volt Information Sciences, Inc. is a leading national provider of Staffing Services and Telecommunications and Information Solutions with a Fortune 100 customer base. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services systems for telephone companies. For additional information, please visit the Volt's web site at http://www.volt.com. This press release contains forward-looking statements which are subject to a number of known and unknown risks, including general economic, competitive and other business conditions, the degree and timing of customer utilization and the rate of renewals of contracts with the Company, that could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Company reports filed with the Securities and Exchange Commission. Copies of the Company's latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission and the New York Stock Exchange, are available without charge upon request to Volt Information Sciences, Inc., 560 Lexington Avenue, New York, New York 10022, 212-704-2400, Attention: Shareholder Relations. These and other SEC filings by the Company are also available to the public over the Internet at the SEC's website at http://www.sec.gov and at the Company's website at http://www.volt.com in the Investor Information section. VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF OPERATIONS (UNAUDITED) THIRD QUARTER ENDED NINE MONTHS ENDED July 31, August 1, July 31, August 1, 2005 2004 2005 2004 (1) ----------- ----------- ------------ ------------ (Restated) (Dollars in thousands, except per share data) Net sales $543,515 $500,732 $1,587,395 $1,393,170 =========== =========== ============ ============ Income from continuing operations before minority interest and income taxes $9,821 $15,292 $19,195 $20,942 Minority interest -- Note A (1,451) (4,704) ----------- ----------- ------------ ------------ Income from continuing operations before income taxes 8,370 15,292 14,491 20,942 Income tax provision (3,404) (6,053) (5,806) (8,248) ----------- ----------- ------------ ------------ Income from continuing operations 4,966 9,239 8,685 12,694 Discontinued operations -sale of real estate -- Note B 9,520 ----------- ----------- ------------ ------------ Net income $4,966 $9,239 $8,685 $22,214 =========== =========== ============ ============ Per Share Data Basic Income from continuing operations $0.32 $0.61 $0.57 $0.84 Discontinued operations 0.62 ----------- ----------- ------------ ------------ Net income $0.32 $0.61 $0.57 $1.46 =========== =========== ============ ============ Diluted: Income from continuing operations $0.32 $0.60 $0.56 $0.83 Discontinued operations 0.62 ----------- ----------- ------------ ------------ Net income $0.32 $0.60 $0.56 $1.45 =========== =========== ============ ============ Weighted average number of shares outstanding - basic 15,327,506 15,232,638 15,314,088 15,225,936 =========== =========== ============ ============ Weighted average number of shares outstanding - diluted 15,392,071 15,398,710 15,426,727 15,341,679 =========== =========== ============ ============ (1) As previously announced in January 2005, the Company has restated its previously issued financial statements for the first two quarters of fiscal year 2004 as a result of inappropriate application of accounting principles for revenue recognition by its telephone directory publishing operation in Uruguay. Accordingly, sales have been increased by $2.5 million and the net operating profit has been increased by $0.7 million or $0.05 per share for the nine months ended August 1, 2004. (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) THIRD QUARTER ENDED NINE MONTHS ENDED July 31, August 1, July 31, August 1, 2005 2004 2005 2004 (1) --------- --------- ----------- ----------- Net Sales: (Dollars in thousands) (Restated) - ---------- Staffing Services -- Note C Traditional Staffing $440,151 $410,112 $1,297,067 $1,150,026 Managed Services 278,339 306,054 888,105 835,850 --------- --------- ----------- ----------- Total Gross Sales 718,490 716,166 2,185,172 1,985,876 Less: Non-Recourse Managed Services (268,305) (298,354) (861,790) (814,770) --------- --------- ----------- ----------- Net Staffing Services 450,185 417,812 1,323,382 1,171,106 Telephone Directory 23,899 19,436 56,972 52,118 Telecommunications Services 30,825 37,041 93,964 100,445 Computer Systems 43,806 30,128 127,920 80,550 Elimination of inter- segment sales (5,200) (3,685) (14,843) (11,049) --------- --------- ----------- ----------- Total Net Sales $543,515 $500,732 $1,587,395 $1,393,170 ========= ========= =========== =========== Income (Loss) from Continuing Operations Before Minority Interest and Income Taxes Staffing Services $6,952 $11,642 $16,668 $22,600 Telephone Directory 5,603 2,621 10,211 7,215 Telecommunications Services (983) 1,064 (3,219) (1,655) Computer Systems 8,050 9,090 24,579 19,479 --------- --------- ----------- ----------- Total Segment Operating Profit 19,622 24,417 48,239 47,639 General corporate expenses (9,220) (7,704) (26,503) (22,897) --------- --------- ----------- ----------- Total Operating Profit 10,402 16,713 21,736 24,742 Interest income and other expense (297) (952) (1,043) (2,381) Foreign exchange gain (loss) - net 144 (28) (116) (98) Interest expense (428) (441) (1,382) (1,321) --------- --------- ----------- ----------- Income from Continuing Operations Before Minority Interest and Income Taxes $9,821 $15,292 $19,195 $20,942 ========= ========= =========== =========== (1) As previously announced in January 2005, the Company has restated its previously issued financial statements for the first two quarters of fiscal year 2004 as a result of inappropriate application of accounting principles for revenue recognition by its telephone directory publishing operation in Uruguay. Accordingly, sales have been increased by $2.5 million and the net operating profit has been increased by $0.7 million for the nine months ended August 1, 2004. (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (Unaudited) July 31, October 31, 2005 2004 ---------- ----------- Assets (Dollars in thousands) Current Assets Cash and cash equivalents, including restricted cash of $24,168 (2005) and $43,722 (2004) -- Note C $89,023 $88,031 Short-term investments 4,183 4,248 Trade receivables, net -- Note D 370,682 409,130 Inventories 37,220 32,676 Recoverable income taxes 900 - Deferred income taxes 9,465 9,385 Prepaid and other assets 19,665 14,847 ---------- ----------- Total Current Assets 531,138 558,317 Property, plant and equipment, net 80,052 85,038 Deposits and other assets 2,532 1,539 Goodwill 29,144 29,144 Other intangible assets, net 15,172 15,998 ---------- ----------- Total Assets $658,038 $690,036 ========== =========== Liabilities and Stockholders' Equity Current Liabilities Notes payable to bank $8,051 $7,955 Current portion of long-term debt 2,367 399 Accounts payable 161,226 192,163 Accrued wages and commissions 52,570 54,200 Accrued taxes other than income taxes 18,013 17,729 Other accruals 30,424 36,036 Deferred income and other liabilities 31,582 36,909 Income taxes payable - 4,270 ---------- ----------- Total Current Liabilities 304,233 349,661 Accrued insurance 3,684 86 Long-term debt 13,409 15,588 Deferred income taxes 9,397 11,764 Minority interest -- Note A 41,124 36,420 Stockholders' Equity 286,191 276,517 ---------- ----------- Total Liabilities and Stockholders' Equity $658,038 $690,036 ========== =========== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) A - On August 2, 2004, Volt Delta Resources, LLC ("VoltDelta"), a wholly-owned subsidiary of the Company, closed a Contribution Agreement signed with Nortel Networks, Inc. ("Nortel Networks") on June 11, 2004 under which Nortel Networks contributed certain of the assets (consisting principally of customer base and contracts, intellectual property and inventory) and certain specified liabilities of its directory and operator services ("DOS") business to VoltDelta in exchange for a 24% minority equity interest in VoltDelta. Together with its subsidiaries, VoltDelta is reported as the Company's Computer Systems segment. VoltDelta is using the assets acquired from Nortel Networks to enhance the operation of its DOS business. The acquisition permits VoltDelta to provide the newly combined customer base with new solutions, an expanded suite of products, content and enhanced services. B - The results of discontinued operations reflect the sale of real estate, in the second quarter of 2004, previously leased by the Company to its former 59% owned subsidiary, Autologic Information International, Inc., which interest was sold in November 2001. The cash transaction resulted in a $9.5 million gain, net of taxes of $4.6 million. C - Under certain contracts with customers, the Company manages the customers' alternative staffing requirements, including transactions between the customer and other staffing vendors ("associate vendors"). When payments to associate vendors are subject to the receipt of the customers' payment to the Company, the arrangements are considered non-recourse against the Company and revenue, other than management fees to the Company, is excluded from sales. Cash restricted to cover such obligations is included in cash and cash equivalents on the July 31, 2005 and October 31, 2004 balance sheets. D - On April 15, 2002, under a securitization program, the Company, through a 100%-owned consolidated special purpose subsidiary, sold a participation interest of $50.0 million out of an initial pool approximating $162.0 million of receivables to an unaffiliated third party. The outstanding balance of the participation interest sold was $95.0 million at July 31, 2005 and $70.0 million at October 31, 2004. Accordingly, the trade receivables included on the July 31, 2005 and October 31, 2004 balance sheets have been reduced to reflect the $95.0 million and $70.0 million participation interest sold, respectively. CONTACT: Volt Information Sciences, Inc. James J. Groberg / Ron Kochman 212-704-2400 voltinvest@volt.com -----END PRIVACY-ENHANCED MESSAGE-----